CO Governor Signs Bill Cutting Pension Benefits

Under the new law (Senate Bill 1), retirees will get no cost of living increase this year instead of the normal 3.5% increase, which would save the Colorado Public Employees Retirement Association (PERA) $80 million, according to the Associated Press. Next year they would get the lesser of inflation or 2% and, after that, annual increases could be no higher than 2%.

The retirement age for new employees will rise from 55 to 60, and contributions will increase by 2% for both employees and their government employers.

Ritter said the cuts “are difficult but necessary,” according to the AP. PERA’s assets fell from $41.4 billion in December 2007 to $29.5 billion in July 2009, although PERA estimates that it will have a 15% rate of return when all its investments are counted from 2009.

The measure was approved by the State Senate and House earlier this month (see Colorado PERA Bill Heads to the House) and had backing from PERA officials (see Colorado PERA Backs Pension Fix).